Under Clyde Blowers Capital’s (CBC) ownership from 2007 to 2011, Clyde Union Pumps (CUP) embarked upon a period of rapid global growth due to a strategy centred around increasing customer intimacy, excelling in product leadership and improving operational excellence. All of which helped to transform the traditional engineering business into a leading global organisation in the design, manufacture, and service of engineered pump solutions.
On 8th May 2007, Clyde Blowers completed the acquisition of the Weir Pumps (Glasgow), a pump technology and engineering specialist, from Weir Group for £48m.
Rebranding the company as Clyde Pumps, Clyde Blowers CEO Jim McColl, commented at the time of the acquisition:
“Our vision for Clyde Pumps is to be a centre of excellence in pump technology, hydraulic design and engineering. We will establish this through engaging the best designers and engineers, our aim being to re-establish this business as a world leader in the markets in which it operates.”
In 2007, Clyde Pumps had just one manufacturing location, 535 employees, an annual revenue of £45m and an EBITDA of £4.5m. All would be set to dramatically increase over the course of CBC’s tenure as they took to the task of creating a world leader in pump engineering solutions.
A key component highlighted by Clyde Blowers in their strategy to create a world-leading business, was identifying strategic acquisition opportunities, enhancing Clyde Pumps’ expertise and increasing their geographic footprint.
In late 2008 Clyde Blowers Capital (CBC) acquired Union Pump, part of the Fluid and Power Division of Textron Inc, successfully executing the deal in a challenging environment in the midst of the 2008 financial crisis. Union Pump and Clyde Union were then merged to form Clyde Union Pumps.
Following the merger, CUP was now the 7th largest pumps manufacturer globally and top five in the markets in which they operated. Leveraging the capabilities inherited from Union Pump, the business was now set for a period of rapid international growth.
A Market-Facing Strategy
Following the landmark merger, the business was structured into seven market-facing business units (Upstream and Downstream Oil, Nuclear Power, Conventional Power, Water & Industrial and Aftermarket),
With this new market-facing focus resulting in a greater customer intimacy in each defined market, key breakthrough tenders were won, creating the momentum needed to implement for future growth plans.
In particular, the Aftermarket side of the business was identified as a key area of focus. Accordingly CUP engaged with their installed base, while expanding their global footprint, which allowed them to offer increased local service capability on a global scale. By 2011, CUP had a total of 23 service centres, offering an unrivalled global service network. Consequently, CUP’s Aftermarket bookings rapidly increased from £25m in 2007 to £126m in 2011.
Investing in the Workforce
Retaining and developing CUP’s employees was fundamental in order to improve their product offering and lead innovation in the pump solutions industry. The landmark ‘Clyde Union Academy’ was launched and became the hub of staff training and development. The training given to the staff, importantly, raised skills and expertise throughout the global workforce.
Significant investment was made in machinery and testing equipment at key facilities, equipping the employees with the tools in order to demonstrate their enhanced engineering capabilities. As a result of improving CUP’s product offering, the business continually launched market-led new products, staying ahead of their competitors, and establishing the company as a technology leader in their key markets.
Furthermore, CUP were able to continue to build their workforce by attracting talent from rival competitors who were releasing people due to the challenging economic climate at the time.
Despite the 2008 acquisition of Union Pump significantly increasing CUP’s international presence, further geographic expansion was crucial in cementing their place as a major player in the global pump engineering solutions market.
By 2010 further expansion had been achieved by;
Given the scale of the continued growth, the total number of employees duly increased from 535 in 2007 to over 2200 in 2011.
At the time of CBC’s exit from the company in 2011, CUP was undoubtedly a leading player within the pump solutions market, experiencing a remarkable period of growth.
In 2011 CUP had a total of 9 global manufacturing locations, an unrivalled global service network with 25 service facilities across the globe, and presence in over 100 countries.
The financial improvements recorded during this period were stellar. At the end of CBC’s four year ownership, CUP impressively recorded over £300m in revenue in 2011 (over £255m increase from 2007) and £40m EBITDA (a £34.5m increase from 2007). Furthermore, a staggering 60% growth of the business was achieved organically with an additional 40% through acquisition.
As a result of realising their goal of growing CUP into a global industry champion, there was inevitably an enormous amount of interest in the business. Consequently, CBC successfully exited the business in December 2011 to SPX, a listed US industrial conglomerate, delivering a market-leading return on invested capital.